Dealing with financial stress and debt anxiety
Worrying about money is something that almost all of us experience at one point or another.
It’s a worry that keeps 32 per cent of us up at night and causes more concern than our jobs, families and health.
According to a Scotiabank study, a whopping threequarters of Canadians worry about their finances, with an average of 10 hours spent worrying each week.
Occasionally, that worry starts to escalate beyond financial stress. When that happens, we can experience debt anxiety – or the obsessive fear of money-related things.
When you have added stress, it can impact your health and relationships. Therefore, it’s important to get control of it before it spirals.
Here are three ways to
manage financial stress before it causes debt anxiety.
1. Get an overview of your situation - To get a clear picture of your financial situation, you’ll need to know your cash flow for at least one month.
You have two ways of tracking your income, debt and spending: with the help of a smartphone app or by manually adding up all your receipts and examining bank and credit card statements. Document income sources, including bonuses, benefits, child support and interest; spending; and outstanding debts.
Review everything closely and look for areas to improve. Next, evaluate your spending habits. Did you spend more money after having a bad week? Are you getting takeout a little more often than you thought?
Use this information to find healthier ways of coping.
2. Get a system in place Being well organized when it comes to your finances can significantly reduce your financial stress.
Use an organizational tool that suits your personality such as an app, spreadsheet or notebook.
Note when you’ll receive your paycheques, bill due dates, monthly budget and savings. Start by eliminating discretionary and impulse spending.
Small treats like a morning coffee and weekly magazine can quickly add up.
Next, create a budget. If you still find your spending exceeds your income, you’ll need to increase your income, lower your spending, or do both. Other ways to help solve your financial problem include:
• Negotiating a lower interest rate with your credit card company
• Eliminating your car payment
• Downsizing your home
• Setting up automatic bill payments
• Regularly reviewing your budget and looking for ways to help reduce expenses
While you execute your plan to reduce your financial stress, you’ll likely encounter some setbacks. For example, an unexpected expense may pop up, making it hard to stay on track.
Regardless of the hindrance, move past it quickly to prevent debt anxiety from creeping in.
3. Get professional advice - Talking to a trusted friend, family member or professional about your money worries is a proven means of stress relief.
Disclosing them to someone else can make them feel less intimidating and put your financial situation in perspective. Getting professional advice is especially helpful if you’ve already tried to reduce your financial stress on your own.
Consider reaching out to a credit counsellor who might be able to help you get your finances back under control.
Susan Eisner is the CEO of SolveYourDebts.com. For over 25 years, she and her team have been helping Atlantic Canadian families learn how to manage credit wisely, reduce debt and live debt free. For more information, go to solveyourdebts.com.